Good policy is the key to growth of small businesses

With the political shenigans of the past few weeks hopefully behind us, it is time to focus on policy rather than on personalities. One thing that all parties in politics have in common is their willingness to attack large companies and their enthusiasm to proclaim love for small businesses.

The behavior towards customers of the big four banks has understandably annoyed many Australians.

And in the last week, politicians have given energy companies a service for alleged price issues.

Big business is a big target, and if it does something wrong, it should expect it to be called to account, just like the rest of us.

But we must not forget that not all companies must be punished for the actions of the few, and that small businesses and large companies depend on each other.

When big companies sneeze, small businesses get flu.

Small businesses need larger companies as customers for their products and services. And large companies provide small businesses with the parts they need to build things and the goods that they sell.

Small companies play a big role in the Australian economy.

About 44 percent of the 10.7 million people in the private non-financial sector work for small businesses.

There are more than two million small businesses in Australia, of which about 61 percent are sole traders.

And about 28 percent has between one and four employees.

About 10 percent or 200,000 small businesses employ between five and 19 people.

With the right policy, the government can help small businesses create jobs and prosperity for the community.

Smaller companies are more common in construction, services, retail, hospitality and transport – all sectors that are under increasing pressure and disruption.

Firstly, we must reduce the administrative burden. Local councils, state and territory governments and the federal government are responsible for a tangle of regulations that binds small businesses.

We do not need three levels of overlapping or even contradictory regulations.

The time and money involved in meeting excessive regulation can be better used to grow the business.

Administrative red tape has direct consequences for and decision-making by business owners. While larger companies have more people and money available to meet their compliance obligations, many small businesses do not.

Governments and councils must recognize this and make it easier for small businesses to understand and comply with the law.

Second, our tax system must encourage people to find jobs and small businesses to spend money in their businesses. The current tax system is far too late for an overhaul.

Our income tax legislation must keep pace with major changes in the way people do business and generate income.

Often, new rules and regulations are piled up on top of old ones.

That is one of the reasons why tax legislation is so complex, which creates unnecessary costs and confusion for small businesses, many of whom need to call on specialists to understand what is going on.

For similar reasons it should be easier to hire people.

It is a fact that Australia is a precious place for companies of all sizes to hire, retain and, if necessary, let staff go.

In a country with one of the highest minimum wages in the world and an average wage of more than $ 80,000 per year, most small business owners earn much less than the average wage. In fact, more than half of them earn less than $ 50,000 per year.

High labor costs mean that many small businesses can not afford to open their business in the evenings, weekends or public holidays.

This means that employers, employees, customers – and even the government's taxes – all lose it.

Employers and employees need a simpler employer-employer system that does not require a legal qualification to understand, so that they can find arrangements that are beneficial to both parties and that suit their circumstances while enjoying the protection of a safety net.

Small businesses are the victims of black spots in Australia's infrastructure.

Operators rely on roads, railways and modern telecommunications to connect with their customers and deliver their goods.

But our main roads are overloaded, our railway networks are under pressure and our telecommunications network is struggling to provide secure, reliable and fast internet connections. And energy costs have skyrocketed.

These problems can be solved. But it requires strong political leadership that is determined by good policy, not scoring points to lay down your opponent and move forward in the latest Newspoll.

The new government of Scott Morrison has it all to do, but not much time for the next election. The opposition agenda has been known for some time.

Both parties must prove that they work for all Australians, including small businesses.

James Pearson is president of the Australian Chamber of Commerce and Industry.

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